Looking at the TSX Composite

Published May 16th, 2006 in Canadian Markets, Market Internals Tags: % above moving average, Toronto, TSX.

The Toronto Composite Index has been whacked with the double whammy of a general market drop and a commodity pull-back (oil and gold). The result has taken the index down from almost 12,500, in mid-April, to around 11,800.

Previously, I wrote about my unique take on % of stocks above their moving averages, and below you can see it applied to the TSX index:

As you can see, the ratio is fast approaching levels which have marked significant market bottoms. I don’t think we’re necessarily there yet, but the situation does deserve to be closely watched.

% above moving average, Toronto, TSX

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3 Responses to “Looking at the TSX Composite”

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1 C. Maoxian May 17th, 2006 at 6:34 am

I don’t get the right scale… can there be more than 100% of stocks above both their 50 and 200 day MAs? Should 1.00 be the max?
2 Babak May 17th, 2006 at 4:30 pm

Perhaps my explanation wasn’t clear enough. Of course you can not have more than 100% or less than 0% of stocks above any MA. The right scale of the graph is showing a ratio: the % of stocks above 50 MA divided by the % of stocks above 200 MA (in the TSX Composite). As I point out, that is my unique take on this metric. Hope that is clear now.